Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 8 - Production Technology and Cost - Exercises - 8.1 Economic Cost and Economic Profit - Page 203: 1.7

Answer

long run

Work Step by Step

A firm is operating in the long run when it is "perfectly flexible in its choice of all inputs." In the long run, all inputs are variable, so the firm can adjust labor, capital, and other resources freely. In contrast, the short run has at least one fixed input, such as a factory or machinery.
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